IRS Violates the Law in Issuing of Tax Liens

August 22nd

WebCPA has reported that over 32,000 taxpayers may have had their rights violated by the Internal Revenue Service. Taxpayers may have been harmed by the IRS’s lack of compliance with legal requirements to notify them and their representatives of their rights related to tax liens in a timely fashion.

IRS Fails to Comply with the Tax Code

Section 6320 of the Tax Code requires that the IRS notify all taxpayers in writing, at their last known address, within five days of the filing of a Notice of Federal Tax Lien. However, the most recent report conducted by the Treasury Inspector General for Tax Administration found that some taxpayers may have been violated or jeopardized by the IRS failing to file such notice in due fashion.

Each year the Treasury Inspector General for Tax Administration is required to determine whether the IRS’s tax lien notices comply with the statutory requirement. This year, the Treasury Inspector General, J. Russell George, reviewed a sample of 125 federal tax liens for the year ending June 30, 2010. After careful examination, George still could not determine if the IRS had always followed the legally mandated procedures.

In addition, the report actually found that the IRS did not always even follow its own procedures for notifying taxpayers’ representatives that federal tax lien notices had been filed

In situations where the notice was returned as undeliverable, George found that the IRS may not have attempted to resend them, or even update addresses in their records.

J. Russell George has recommended that, at the very least, the IRS needs to ensure that procedures are consistent. With this in mind, the IRS has stated it plans to revaluate procedures to ensure they are consistent across the board.